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As 2022 kicks off, new federal protections against unexpected medical bills have come into effect, which the U.S. Department of Health and Human Services has said will protect consumers from bills from third-party providers, facilities and ambulance providers. The protection came into effect on January 1.
Implemented under the No Surprises Act, the protections prohibit unexpected billing in private insurance for most emergency care and many non-emergency care cases. They also require uninsured and self-paying patients to receive vital information, including statements of expected costs and details of their rights.
The Biden administration has touted these measures, saying they will help foster competition in healthcare and other sectors of the US economy.
A November 2021 report from the HHS Office of the Assistant Secretary for Planning and Evaluation (ASPE) reviewed evidence about unexpected billing and the need for consumer protections in the No Surprises Act. The report found that surprise billing is common among those with private insurance — nearly one in five patients who go to the emergency room, undergo elective surgery, or give birth in a hospital receive surprise bills, with average costs ranging from $750 to $750. 2,600 per episode.
WHAT IS THE IMPACT?
For people who have health insurance through an employer, a health insurance marketplace, or an individual health plan purchased directly from an insurer, the new rules prohibit surprise bills every time a patient receives emergency care, and require cost-sharing for these services. , such as co-pays, always based on in-network rates, even when care is received without prior authorization.
They also prohibit surprise bills from certain out-of-network providers if a patient goes to an in-network hospital for a procedure. This means that cost sharing for certain additional services during the visit will generally be based on in-network rates, according to HHS.
The new rules also require providers and facilities to share easy-to-understand notices with patients explaining applicable billing protections and who to contact if they have concerns that a provider or facility has violated them.
For people who don’t have health insurance or pay for care themselves, the rules require most providers to provide a “good faith estimate” of costs before providing non-emergency care, HHS said.
The good faith estimate should include the expected costs for the primary item or service, as well as any other items or services that can reasonably be expected. For example, for an uninsured or self-paying consumer undergoing surgery, the estimate will include the cost of the surgery, as well as any labs, other tests, and anesthesia that may be used during the procedure.
Uninsured or self-paying consumers who receive a final bill that exceeds the good faith estimate by $400 or more may dispute the final cost.
While some states have enacted laws to reduce or eliminate unexpected billing, no comprehensive consumer protections nationwide was available until the implementation of the new rules, according to HHS. What the No Surprises Act does, the agency said, is build a national foundation of protection with the set of final and proposed rules issued in 2021, which will complement existing laws in states where they already exist.
THE BIGGER TREND
When the surprise billing protections were still in the interim in the fall, they received mixed reactions from industry players, with the American Hospital Association calling the interim final rule a “windfall for insurers.”
“The rule unfairly favors insurers to the detriment of hospitals and physicians who actually care for patients,” the AHA said at the time. “This consumer protection needs to be implemented properly, and this misses the point.”
While the No Surprises Act offers protections strongly supported by hospitals and health systems, the provisional final rule has “moved away from Congress’ intent” and powers proposals Congress had rejected, the AHA said.
Meanwhile, AHIP, which represents insurers, took a different turn, saying that the independent dispute resolution process in the interim final rule should encourage more providers to join health plan networks.
The Blue Cross Blue Shield Association called it a “win for patients” and a step toward a more affordable and equitable health system.
The final rule also received positive response from the Coalition Against Surprise Medical Billing, which said the rules strengthen the statute that requires the qualifying payment amount to be the primary and overriding consideration for final payment determinations as part of the independent dispute resolution (IDR) process.
Surprising medical bills are relatively common among privately insured patients and can average more than $1,200 for services provided by anesthesiologists, $2,600 for surgical assistants and $750 for childbirth-related care, according to the report from the HHS Office of the Assistant Secretary for planning and evaluation.
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